This invention relates generally to a method and system for the exchange, analysis, and subsequent redistribution of performance data for businesses.
Many businesses have highly perishable product inventories which are typically available in daily increments. These products can be sold in advance for consumption on a specific day, but if product remains unsold when the given day has elapsed it is lost for sale forever. Some examples of these industries include hotels, rental car companies, and airlines. In each of these cases, hotel rooms, rental cars, and airline seats can only be sold up to and until the present day. The opportunity to sell rooms, cars, and airline seats from past days does not exist.
As an example, let us assume that a hotel is engaged in the sale of rooms for July 10 of a given year. The hotel""s room inventory for this day can be sold in advance on any day prior to July 10, and up to and including July 10. However, if the hotel fails to sell all of its July 10 inventory by that date, the opportunity for sale is lost forever. On July 11 it is not possible to sell unused July 10 rooms.
Any business in which unsold inventory is lost on a daily basis can be referred to as having time-dependent inventory, and can be referred to as a time dependent inventory (TDI) business.
For this reason, TDI businesses typically develop Yield Management Systems to optimize daily revenues. The purpose of these systems is to sell as much of the product inventory as possible for any given day, at the highest possible price.
Using the hotel business as an example, performance data from the sale of rooms includes two industry-standard measurements: the number of rooms sold divided by the number of rooms available for sale (occupancy percentage, or Occupancy,) and the average price of each room sold (Average Daily Rate, or ADR.) Occupancy is typically referred to as a percentage number, but may alternatively be expressed simply as the number of rooms sold. The ADR and occupancy performance data can be calculated over a period of a day, a week, a month, or any other time period. When calculated in this manner the values are referred to as the daily, weekly, and monthly ADR or occupancy. In the case of the hotel industry, the industry standard measurements, i.e. occupancy and ADR, can be processed to calculate a commonly used hotel industry measurement known as RevPAR. RevPAR is a type of processed performance data meaning xe2x80x9cRevenue per Available Roomxe2x80x9d and can apply to any period of time desiredxe2x80x94a day, week, month, quarter, or year as an example.
RevPAR can be calculated using different methods. In an embodiment relevant to the hotel industry the amount of room revenue realized by a hotel is divided by the number of rooms available in the hotel. For example, a 100 room hotel, earning $5000 in room revenue during a given day, has a RevPAR that day of $5000/100=$50.00.
In a second method of calculating RevPAR the ADR is multiplied by the occupancy percentage. For example, If the above hotel on the same day as above earned $5000 in revenue by selling 80 rooms at an ADR of $62.50, then:
Occupancy Percentage=80%
ADR=$62.50
RevPAR=$62.50xc3x970.80=$50.00
Collectively, in a hotel application the two measurements of business operations, (ADR and Occupancy), and other measurements (such as RevPAR), which can be derived from them can be referred to as xe2x80x9cperformance data,xe2x80x9d and can again be referred to as daily, weekly, or monthly performance data.
In addition, for any TDI business, key measurements of business operations can be referred to collectively as xe2x80x98performance data.xe2x80x99
Yield Management Systems in the hotel industry, either manual or computer-operated, seek to maximize daily occupied rooms (Occupancy) at the highest possible ADR. These systems rely upon several factors, including historical data, anticipated special events, the pace of reservation booking activity into the hotel, how many rooms are booked in advance for future dates, and the performance of other hotels in the local market area. Yield Management Systems must operate on a daily basis, making changes to each individual day""s pricing, to maximize revenues over the long run.
Knowledge of other area hotel Occupancy rates and ADR""s is important because it provides a guideline for setting the price of each room sold. If rooms are priced significantly higher than competitive hotels in the same market, fewer rooms may be sold, meaning less revenue earned. Conversely, if rooms are sold at a price significantly lower than competing hotels in a market, revenue will again be negatively impacted, as more could have been charged for rooms sold.
Again using a hotel example, another illustration of a clear need for daily Occupancy and ADR relates to high room demand in a market due to special events. At times, special regional events such as a football game or other athletic event, conventions, natural disasters, city and state sponsored functions, and other similar activities create a temporary surge in demand for hotel rooms in a given area. Typically, hotels prepare for the high demand by raising their prices for the duration of the event. However, frequently demand for the event may drop after the first day, or expected customers may fail to materialize. In this case, there is no current method for hotels to rapidly assess occupancy levels in competitive hotels in their market area, and make price adjustments accordingly. If market area occupancy levels remain high, a given hotel would typically continue high pricing. If occupancy in the market began to fall, the hotel has the opportunity to maximize revenue by dropping price and taking occupied rooms from competitors.
There are informal arrangements in some communities in which hotels exchange Occupancy, and ADR performance data at the end of a fiscal period; (typically monthly.) However, these arrangements are informal, often unreliable, and may be inaccurate. They also fail to provide the daily Occupancy and ADR information required to maximize revenues during the month.
In addition, there are businesses which have existed and continue to exist which report rate and occupancy numbers to hotels and their management companies. However, these services do not deliver daily Occupancy and ADR information to participating hotels. Generally, they operate with a 4 to 6 week delay between the end of a fiscal period and delivery of the subsequent report. As such, there is currently no way for hotels to reliably receive on a daily basis from competitive hotels the daily Occupancy and ADR information needed to maximize revenues.
In the same manner, in the rental car industry performance data related to the rental of automobiles can include two industry standard measurements: the Number of Rentals, which is the number of cars sold on any given day, and the Average Daily Rate (ADR), which is the total revenue received from the sale of cars divided by the number of cars sold.
In the cases of the hotel industry, the airline industry and the car rental industry, as well as other TDI industries, if there is a lag between the time of the operations represented by the performance data and the time when the processed data is available, the processed data can be of little value for certain purposes. For example, determining the pricing of a product for sale today based on performance data from last month or even last week can be irrelevant and unreliable.
Thus, one object of the present invention is to provide a system and method by which participating TDI businesses in a market area can reliably exchange daily performance data, and thereby use the information in the yield management process. In accordance with one aspect of this invention, there is provided a system and method for participating customers to transmit performance data to a database, utilizing the Internet or other public or private date transmission network.
In accordance with another aspect of the invention, there is provided a system and method for the extraction of the information from the database, and the subsequent combination, analysis, organization, and reporting in tabular and graphical format of the performance data.
In accordance with yet another aspect of this invention there is provided a system and method for transmitting the analyzed and organized data back to the TDI business customers when demanded by the customer, in the form of tables and graphical reports.
In accordance with yet another aspect of this invention there is provided a system and method for automatically transmitting a simplified version of the performance data report to members of client business management in the form of electronic mail.
Thus, one embodiment of the present invention provides TDI businesses with the data required for optimal yield management decisions in order to maximize revenues on a daily basis. The availability of this information on a daily basis allows TDI businesses greater cash flow and thereby higher profit levels to business ownership and management groups.
A method is taught for processing performance data in a data reporting system having a plurality of business entities and a report center in communication with the plurality of business entities. The method includes transmitting by the plurality of business entities to the report center customer performance data indicative of the operation of the business entities during a first day and processing of the customer performance data by the report center to provide processed performance data. Availability of the processed performance data is provided to a selected business entity during a second day wherein the time difference between the first day and the second day is less than eleven days. The processed performance data includes processed occupancy data, processed average daily rate data and processed RevPAR data. The method further includes determining price information in accordance with the processed performance data, pricing a product by the selected business entity in accordance with the determined price information, and selling the product according to the pricing. The processed performance data can be requested by the selected business entity prior to providing availability of the processed performance data. Data can be transmitted by way of a network data connection and an internet connection.